AHMEDABAD, INDIA
— After seven weeks and 900 deaths, the communal riots in Gujarat show no signs of stopping. In fact, the police here and many locals were simply watching yesterday as a few dozen Hindu hoodlums broke into Muslim-owned shops and hurled the contents into the street before setting the shops aflame.

Out on the Mahatma Gandhi bridge, which crosses the Sabarmati River, Hindus have stopped their cars to watch the smoke rise above the Muslim parts of town. Some have brought plastic bags of salty snacks, as if this were a movie.

"This is only for a short period," assures Rajesh Modi, a well-dressed accountant from Ahmedabad. "The violence will come down in one or two months."

The riots of Gujarat may have begun as revenge for the torching by a Muslim mob of a Hindu-crowded train in the Gujarati town of Godhra Feb. 27, but they now have clearly taken on a momentum of their own.

The violence comes in a state that pro-Hindu parties consider a laboratory of the philosophy of Hindutva, or Hindu-ness, and where Hindu politicians increasingly tell the Muslim and other minorities to know their place. While state leaders say the law-and-order situation has largely returned to normal, the continued death toll suggests otherwise. The effects, both on the local economy and on India's international image, have been immense. The inability of officials to stop the violence raises serious questions about future communal harmony in a state that Mahatma Gandhi once called home.

"To know why this is happening in Gujarat, you have to know that Gujarat has the largest proportion of petit bourgeoisie, the shopkeepers and small businessmen," says Prem Shankar Jha, a veteran political analyst and senior columnist for Outlook magazine.

Small businessmen "have always been the breeding grounds of fascism," Mr. Jha continues. "Owner-managed small businesses always feel the least control over [their] future. That breeds a certain insecurity, and they become extremely biased against people they see as a threat."

The communal strife and the accusations that state leaders are encouraging the rioters has caused some aid groups, including the European Commission, to question whether they should continue sending aid.

"If the chief minister, Narendra Modi, wants to control this, he can control it within 24 hours," says Amarsinh Chaudhary, leader of the main opposition party, the Congress. "But he's not in the mood. There is only one solution  for somebody to come from the outside and stop all this."

Not so, says Jaideep Patel, leader of the World Hindu Council, or Vishwa Hindu Parishad, a social organization that backs the ruling BJP. "Muslim leaders created this problem, and Narendra Modi has controlled the situation, but Congress has created antisocial Muslim elements to disrupt the peace."

In any case, Ahmedabad has none of the signs of a typical war zone. The streets are well-paved and among the cleanest in India. The factories are new and lead the country in exports. The shops are prosperous and chock full of Western- and Indian-made goods. Beggars are rare.

Indeed, even the rioters are well dressed. While the police tend to blame the violence on a small group of "miscreants," most of the rioters outside the police station wear designer jeans, Western sneakers, and the obligatory handkerchief across the face. Behind them, businessmen in shirts and ties and housewives in silk saris watch the excitement, showing no desire to stop the violence.

"Their people started it," says Sanjeev, a college student, watching the rioters with Massimo sunglasses perched on his head. "They come out of their mosques with weapons, and afterward these people are, for their own self-defense, doing these things. These Muslims neighbors don't know how to live with Hindu neighbors."

Intentionally or not, the riots have created a kind of ethnic cleansing, with lower-class Hindus leaving mostly-Muslim neighborhoods and Muslims fleeing for all-Muslim refugee camps scattered across town.

As a result, there does not appear to be any chance of Hindus and Muslims being neighbors in the near future. In the Shahibagh neighborhood, at a public school converted into a refugee camp for 4,700 Muslims, Suraiya Bano remembers the day she lost 10 family members in a single, fiery attack.

"I can never trust them again," she says of her former Hindu neighbors. "The neighbors, they were the ones telling the rioters where to go and whom to kill. After we leave this camp, we cannot be safe in all of Ahmedabad. We will have to find someplace else."

Even so, the harmony that once prevailed among Hindus and Muslims in Gujarat lives on in the friendship of Hindu shopkeeper Mahendra Jain and his best buddy, a Muslim named Sherubhai Katiyar.

"Nobody can live without the other," says Mr. Jain, whose shop sits across the street from Shahibagh camp. "This cycle has two wheels, Hindu and Muslim. Without one of those wheels, you cannot move forward."